Justia Banking Opinion Summaries

Plaintiff filed suit against the Bank, alleging violations of the federal Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., and California's unfair competition law (UCL), Bus. & Prof. Code, 17200 et seq., fraudulent omission/concealment, and injunctive relief. The trial court dismissed the complaint with prejudice. The trial court applied the doctrines of res judicata (claim preclusion) and collateral estoppel (issue preclusion) based on plaintiff's prior unsuccessful lawsuit against the Bank for breach of contract. The court concluded that the Bank's demurrer was properly sustained without leave to amend where the TILA claim was not subject to claim preclusion or issue preclusion, but was time-barred; plaintiff adequately alleged injury in fact and had standing to pursue a UCL claim, but the UCL claim was time-barred; the fraudulent omission/concealment claim was likewise time-barred; plaintiff's request for injunctive relief necessarily failed as well; and the Bank's demurrer was properly sustained without leave to amend. Accordingly, the court affirmed the judgment. View "Ivanoff v. Bank of America" on Justia Law

This case stems from the simultaneous refinancing of a home equity line of credit by two different lenders in 2006, which resulted in a dispute over the priority of their recorded deeds of trust. On appeal, Bank of New York Melon challenged the dismissal of its suit against Citibank. The court reversed the judgment sustaining Citibank's demurrers to Bank of New York Melon's first and second amended complaints, that alleged all of Bank of New York Melon's causes of action were barred by the three-year statute of limitations in Code of Civil Procedure section 338. The court concluded, however, that Bank of New York Melon has stated a claim for equitable subrogation, which is not subject to the statute. The court considered all other theories in the first and second amended complaint to be variations of that cause of action, rather than independent causes of action, as they assert no independent right for which relief may be granted under California law. The court explained that the claim for equitable subrogation is not subject to the statute and is not time-barred. Therefore, the court reversed and remanded. View "Bank of New York Mellon v. Citibank" on Justia Law

Plaintiffs Andrew and Kathi Kalnoki (the Kalnokis) appealed a judgment dismissing their second amended complaint for wrongful foreclosure-related causes of action after the trial court sustained the defendants’ demurrers without leave to amend (case No. C073207, the foreclosure appeal). They separately appealed an order after judgment awarding attorney fees to defendants (case No. C075062, the attorney fees appeal), and an order disbursing funds the Kalnokis deposited with the court under Code of Civil Procedure section 1170.5 to delay the trial in an unlawful detainer action filed against them regarding the residential property at issue here (case No. C079144, the rental disbursement appeal). The Court of Appeal consolidated all three appellate cases for argument and decision. Finding that the Kalnokis failed to allege a cause of action on any theory, the Court affirmed the judgments dismissing the second amended complaint with prejudice. The Court also concluded the trial court properly awarded attorney fees. The Court found, however, that the court erred in disbursing to Wells Fargo the rental funds on deposit with the court. The Court therefore reversed the rental disbursement order and order that the funds be returned to the Kalnokis. View "Kalnoki v. First American" on Justia Law

Plaintiff filed a series of lawsuits challenging Chase's efforts to foreclose upon his real property. In this appeal, plaintiff challenges a judgment of dismissal entered after the trial court sustained the demurrer of Chase. The court concluded that plaintiff failed to state a cause of action for violation of the Homeowners Bill of Rights, lack of standing to foreclose, illegal substitution of trustee, and fraud. The court also concluded that the trial court properly considered the declaration of Chase's counsel, among other things, before denying plaintiff's motion for a preliminary injunction. Finally, the court explained that principles of res judicata are fatal to the present lawsuit and theoretical future lawsuits seeking to vindicate the same primary right. Accordingly, the court affirmed the judgment. View "Gillies v. JPMorgan Chase Bank, N.A." on Justia Law

The California Supreme Court's narrow ruling on a borrower's standing to challenge the validity of the chain of assignments involved in the securitization of her loans in "Yvanova v. New Century Mortgage Corp." (62 Cal.4th 919 (2016)) clarified what was the dispositive issue in this appeal, but expressly did not decide how to resolve it. In "Yvanova," the Court held a borrower had standing to allege that an assignment of the promissory note and deed of trust to the foreclosing party is void, not voidable; yet it did not decide whether a post-closing date transfer into a New York securitized trust is void or voidable. New York law, as interpreted by an overwhelming majority of New York, California, and federal courts, however, provided that defects in the securitization of loans can be ratified by the beneficiaries of the trusts established to hold the mortgage-backed securities and, as a result, the assignments are voidable. Following this precedent, the Court of Appeal concluded plaintiff Maria Mendoza did not have standing to challenge the alleged irregularities in the securitization of her loan. Therefore, the trial court's dismissal of the second amended complaint for wrongful foreclosure, declaratory relief, and quiet title was affirmed. View "Mendoza v. JPMorgan Chase Bank" on Justia Law

Plaintiff, a borrower of a home loan, filed suit against lending banks, seeking an injunction to prevent a foreclosure. The trial court sustained the lenders’ demurrers and entered a judgment of dismissal. The court held that the availability of injunctive relief under the 2013 Homeowner's Bill of Rights (HBOR) is governed exclusively by its two provisions - Civil Code, sections 2924.12, subdivision (a)(1) and 2924.19, subdivision (a)(1) - in which the Legislature authorized the courts to interpose such relief into the nonjudicial foreclosure scheme. Neither provision authorizes a court to enjoin a violation of section 2924(a)(6). Thus, no injunctive relief is available for a violation of that section. Therefore, the court affirmed the judgment. Furthermore, plaintiff failed to show a reasonable possibility of amending his complaint to plead any of the grounds for injunctive relief that the HBOR authorizes. The court also affirmed the trial court’s order sustaining without leave to amend a demurrer to a separate breach of contract cause of action. View "Lucioni v. Bank of America" on Justia Law

Plaintiff filed suit against his lender, Impac, and others, alleging causes of action arising from the nonjudicial foreclosure sale of his residence. The trial court sustained defendants' demurrer to the entire pleading without leave to amend, and thereafter entered a judgment of dismissal. The court concluded that plaintiff offered no citation to federal or California authority (other than Glaski v. Bank of America, which the court declined to follow) to support his assertion that a 2009 assignment is void because it was made after the ISA Trust’s closing date; plaintiff has the burden to prove that the nonjudicial foreclosure was wrongful; even if language in the deed of trust might have provided plaintiff with standing to assert a defense to prevent a foreclosure, it does not help him in this instance; the problem with plaintiff's claims is not that the deed of trust precludes him from alleging an invalid assignment, but that he has not sufficiently alleged an invalid assignment; and, because he has not alleged sufficient facts to establish that critical allegation, the proposed new cause of action would also fail as a matter of law. Accordingly, the court affirmed the judgment. View "Yhudai v. Impac Funding Corp." on Justia Law

In 2007, Naifeh and Ristic obtained a loan from WaMu for San Francisco property. WaMu provided a disclosure of the loan terms as required by the Truth in Lending Act (TILA, 15 U.S.C. 1601). After the borrowers defaulted, Naifeh sent letters, asserting that she and Ristic were rescinding the loan under “Regulation Z” (12 C.F.R. 226.33(b)) based on TILA disclosure deficiencies. A month before the scheduled foreclosure sale Naifeh caused several documents to be recorded with the county, purporting to show she owed nothing on the loan. Naifeh was present at the trustee’s sale, distributing notices representing that the trustee knew there were contrary claims to title. No one bid. A Trustee’s Deed was recorded, granting title to BofA. Naifeh continued to record documents. BofA filed suit, seeking cancellation of instruments and quiet title. The trial court held that Naifeh’s notice of rescission was insufficient. Because of a decision subsequently issued by the U.S. Supreme Court, the court of appeal vacated and remanded for adjudication of the rescission defense. A borrower may rescind the loan transaction under TILA without filing suit, but when the rescission is challenged, a court may decide whether the notice was timely and whether the TILA procedure should be modified in light of particular circumstances. View "U.S. Bank Nat'l Ass'n as Tr. v. Naifeh" on Justia Law

222 plaintiffs, homeowners, in 22 related mass actions against various financial institutions and mortgage loan servicers, appeal from an order dismissing those actions after the trial court sustained without leave to amend defendants' demurrers to an “omnibus” third amended complaint. Each mass action involves numerous plaintiffs whose loans originated with and/or were serviced by a single defendant or related affiliates. The omnibus complaint asserted seven causes of action. On appeal, plaintiffs challenge only the trial court's denial of their request for leave to amend their unfair business practices cause of action (the UCL claim) to add factual allegations to support an entirely different theory that was suggested in seven sentences of the 29-page complaint. The court concluded that the trial court did not abuse its discretion by denying plaintiffs leave to amend their complaint because they failed to show that their proposed additional facts are sufficient to state a UCL claim. Moreover, even if their proposed additional facts were sufficient, they clearly demonstrate that the claim could not be prosecuted as a mass action because the 222 plaintiffs' claims do not arise out of the same transaction or occurrence, as required by Code of Civil Procedure section 378. Accordingly, the court affirmed the judgment. View "Aghaji v. Bank of America" on Justia Law

In this action for wrongful foreclosure, the homeowner, Monica Sciarratta, alleged that as a result of a void assignment of her promissory note and deed of trust, the entity that conducted a nonjudicial foreclosure sale on her home had no interest in either the underlying debt or the subject property. In Yvanova v. New Century Mortgage Corp., (62 Cal.4th 919 (2016)), the California Supreme Court held that the homeowner has standing to sue for wrongful foreclosure. However, Yvanova did not address "any of the substantive elements of the wrongful foreclosure tort," and in particular did not address "prejudice . . . as an element of wrongful foreclosure." The issue this case presented was the question of "prejudice" left open in Yvanova: The Court of Appeal found that policy considerations that drove the standing analysis in Yvanova compelled a similar result in this case. "[A] homeowner who has been foreclosed on by one with no right to do so -by those facts alone- sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure. When a non-debtholder forecloses, a homeowner is harmed by losing her home to an entity with no legal right to take it. Therefore under those circumstances, the void assignment is the proximate cause of actual injury and all that is required to be alleged to satisfy the element of prejudice or harm in a wrongful foreclosure cause of action." The opposite rule, urged by defendants in this case, would allow an entity to foreclose with impunity on homes that were worth less than the amount of the debt, even if there were no legal justification whatsoever for the foreclosure. "The potential consequences of wrongfully evicting homeowners are too severe to allow such a result." The Court of Appeal reversed the judgment of dismissal entered after the trial court erroneously sustained a demurrer to Sciarratta's first amended complaint without leave to amend, and remanded for further proceedings. View "Sciarratta v. U.S. Bank" on Justia Law